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PPL Cup 01 Easy Sponsored by PRTC PDF
PPL Cup 01 Easy Sponsored by PRTC PDF
In its December 31 2009 balance sheet, Aaron should report deferred revenues from
subscription of
a. P 1,800,000 c. P 3,600,000
b. P 3,300,000 d. P 5,400,000
a. P 0 c. 9,000
b. P6,000 d. 12,000
4. Buyer Co. regularly buys shirts from Vendor Company and is allowed trade discounts
of 20% and 10% from the last price. Buyer purchased shirts from Vendor on May 27,
2009 and received an invoice with a list price of P 100,000 and payment terms 2/10, n/30.
If buyer uses the net method of recording purchases, the journal entry to record the
payment of June 8, 2009 will include
a. A debit to Accounts payable P 72,000
b. A debit on purchase discount lost of P 1,400
c. A credit to purchase discount of P 1,400
d. A credit to Cash of P 70,560
5. White Airlines sold a used jet aircraft to brown company for P 800,000 accepting a
five year 6% note for the entire amount. Browns incremental borrowing rate was 14%.
The annual payment of principal and interest on note was to be P189,930. The aircraft
could have been sold at an established cash price of P 651,460. The present value of an
ordinary annuity of P1 at 8% for five periods is 3.99. The aircraft should be capitalized
on Browns book at
a. P 949,650 c. P 757,820
b. P 800,000 d. P 651,460
Yang owns a patent for an established successful drug that has a remaining life of 8
years. A firms of specialist advisors, Tantsahan, has estimated the current value of this
patent to be P 10 million; however, the company is awaiting for outcome of clinical trials
where the drug has been tested to treat a different illness. If trials were successful, the
value of the drug is then estimated to be 15 million. Also included in the company’s
balance sheet is P 2 million for medical research that has been conducted on behalf of a
client.
a. P 8,000,000 c. P 3,000,000
b. P 5,000,000 d. P 20,000,000
a. P 325,000 c. P 335,000
b. P 293,750 d. P 330,000
8. On December 28, 2009, Hornets Company commits itself to purchase a financial asset
to be classified as held to maturity for P 1,000,000 its fair value on commitment (trade)
date. This security has a fair value of P 1,002,000 and P 1,005,000 on December 31, 2009
(Hornets’ Financial Year End), and January 5, 2010 (settlement date), respectively. If
Hornets applies the settlement date accounting method to account for regular way
purchases of its securities, the financial asset should be recognized on January 5, 2010 at
9. On July 2009, Jenny Ltd leases a machine with a fair value of P 109,445 to Rose Ltd
for five years at annual rental (in advance) of P 25,000 and Rose Ltd guarantees in full
estimated residual value of P 15,000 on return of the asset. What would be the intestest
rate implicit in the lease?
a. 14% c. 10%
b. 12% d. 9%
10. D Company had the following deferred tax balances at reporting date – Deferred tax
assets, P 1,200,000; Deferred tax liabilities, P 3,000,000. Effective from the first day of
financial period, the company rate of income tax was reduced from 40% to 30%. The
adjustment to income tax expense to recognize the impact of the tax rate change is:
a. DR P 600,000 c. DR P 450,000
b. CR P 600,000 d. CR P 450,000
11. On December 31, 2009, Entity X acquired an investment for P100,000 plus a
purchase commission of P 2,000. The investment is classified as available for sale. On
December 31, 2009, quoted market price of the investment is P 100,000. If the
investment were sold, a commission of P 3,000 would be paid. On December 31, 2009,
the entity should recognize unrealized loss directly in equity of
a. P 2,000 c. P 5,000
b. P 3,000 d. P 0
12. As of June 30, 2009, the bank statement of Ang Po Trading had an ending balance of
P 373,612. The following data were assembled in the course of reconciling the bank
balance:
The bank erroneously credited Ang Po Trading for P 2,150 on June 22.
During the month, the bank charged back NSF checks amounting to P 2,340 of
which P 800 had been redeposited by the 25th of June.
Collection for June 30 totaling P 10, 330 was deposited the following month.
Checks outstanding as of June 30 were P 30,205
Notes collected by the bank for Ang Po Trading were P 8,150 and the
corresponding bank charges were P 50.
The adjusted bank balance on June 30, 2009 is
a. P 351, 587 c. P 353 927
b. P 358, 147 d. P 359 687
Suggested Answers:
1. a
2. d
3. d
4. b
5. d
6. a
7. c
8. a
9. b
10. d
11. a
12. a